1 BLACKROCK FUNDS V BlackRock Core Bond Portfolio BlackRock Credit Strategies Income Fund BlackRock Emerging Markets Bond Fund BlackRock Emerging Markets Flexible Dynamic Bond Portfolio BlackRock Emerging Markets Local Currency Bond Fund BlackRock Floating Rate Income Portfolio BlackRock GNMA Portfolio BlackRock High Yield Bond Portfolio BlackRock Inflation Protected Bond Portfolio BlackRock Low Duration Bond Portfolio BlackRock Strategic Income Opportunities Portfolio BlackRock U.S. Government Bond Portfolio (each, a Fund and collectively, the Funds ) Supplement dated September 17, 2018 to the Summary Prospectuses, the Prospectuses and the Statement of Additional Information of each Fund, each dated August 10, 2018, as supplemented to date On September 17, 2018 (the Closing Date ), each Fund acquired the assets, subject to the liabilities, of the corresponding series of BlackRock Funds II (each, a Predecessor Fund ) set forth in the table below through a tax-free reorganization (each, a Reorganization ): Fund, each a series of BlackRock Funds V BlackRock Core Bond Portfolio BlackRock Credit Strategies Income Fund BlackRock Emerging Markets Bond Fund BlackRock Emerging Markets Flexible Dynamic Bond Portfolio BlackRock Emerging Markets Local Currency Bond Fund BlackRock Floating Rate Income Portfolio BlackRock GNMA Portfolio BlackRock High Yield Bond Portfolio BlackRock Inflation Protected Bond Portfolio BlackRock Low Duration Bond Portfolio BlackRock Strategic Income Opportunities Portfolio BlackRock U.S. Government Bond Portfolio Corresponding Predecessor Fund, each a series of BlackRock Funds II BlackRock Core Bond Portfolio BlackRock Credit Strategies Income Fund BlackRock Emerging Markets Bond Fund BlackRock Emerging Markets Flexible Dynamic Bond Portfolio BlackRock Emerging Markets Local Currency Bond Fund BlackRock Floating Rate Income Portfolio BlackRock GNMA Portfolio BlackRock High Yield Bond Portfolio BlackRock Inflation Protected Bond Portfolio BlackRock Low Duration Bond Portfolio BlackRock Strategic Income Opportunities Portfolio BlackRock U.S. Government Bond Portfolio As a result of each Reorganization, shareholders of the applicable Predecessor Fund received shares of the corresponding Fund of the same class and with the same aggregate net asset value as their shares held in the Predecessor Fund as of the Closing Date. Each Predecessor Fund is the accounting survivor of its Reorganization, which means the corresponding Fund adopted the performance and financial history of such Predecessor Fund as of the Closing Date. PR2SAI-BLKV-0918SUP Shareholders should retain this Supplement for future reference.
2 AUGUST 10, 2018 SUMMARY PROSPECTUS BlackRock Funds V Investor, Institutional and Class R BlackRock Low Duration Bond Portfolio Investor A: BLDAX Investor C: BLDCX Institutional: BFMSX Class R: BLDPX Before you invest, you may want to review the Fund s prospectus, which contains more information about the Fund and its risks. You can find the Fund s prospectus (including amendments and supplements) and other information about the Fund, including the Fund s statement of additional information and shareholder report, online at You can also get this information at no cost by calling (800) or by sending an request to or from your financial professional. The Fund s prospectus and statement of additional information, both dated August 10, 2018, as amended and supplemented from time to time, are incorporated by reference into (legally made a part of) this Summary Prospectus. This Summary Prospectus contains information you should know before investing, including information about risks. Please read it before you invest and keep it for future reference. The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Summary Prospectus. Any representation to the contrary is a criminal offense. Not FDIC Insured May Lose Value No Bank Guarantee
3 Summary Prospectus Key Facts About BlackRock Low Duration Bond Portfolio Investment Objective The investment objective of the BlackRock Low Duration Bond Portfolio (the Low Duration Fund or the Fund ) is to seek to maximize total return, consistent with income generation and prudent investment management. Fees and Expenses of the Fund This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in the fund complex advised by BlackRock Advisors, LLC ( BlackRock ) or its affiliates. More information about these and other discounts is available from your financial professional or your selected securities dealer, broker, investment adviser, service provider or industry professional (including BlackRock, The PNC Financial Services Group, Inc. ( PNC ) and their respective affiliates) (each a Financial Intermediary ) and in the Details About the Share Classes and the Intermediary-Defined Sales Charge Waiver Policies sections on pages 43 and A-1, respectively, of the Fund s prospectus and in the Purchase of section on page II-73 of Part II of the Fund s Statement of Additional Information. Shareholder Fees (fees paid directly from your investment) Investor A Investor C Institutional Class R Maximum Sales Charge (Load) Imposed on Purchases (as percentage of offering price) 2.25% None None None Maximum Deferred Sales Charge (Load) (as percentage of offering price or redemption proceeds, whichever is lower) None % 2 None None Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) Investor A Investor C Institutional Class R Management Fee 3,4,6 0.29% 0.29% 0.29% 0.29% Distribution and/or Service (12b-1) Fees 0.25% 1.00% None 0.50% Other Expenses % 0.26% 0.17% 0.43% Interest Expense 0.01% 0.01% 0.01% 0.01% Other Expenses of the Fund 0.23% 0.25% 0.16% 0.42% Total Annual Fund Operating Expenses % 1.55% 0.46% 1.22% Fee Waivers and/or Expense Reimbursements 3,7 (0.12)% (0.14)% (0.05)% (0.31)% Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements 3,7 0.66% 1.41% 0.41% 0.91% 1 A contingent deferred sales charge ( CDSC ) of 0.75% is assessed on certain redemptions of Investor A made within 18 months after purchase where no initial sales charge was paid at the time of purchase as part of an investment of $500,000 or more. 2 There is no CDSC on Investor C after one year. 3 As described in the Management of the Funds section of the Fund s prospectus beginning on page 58, BlackRock has contractually agreed to waive the management fee with respect to any portion of the Fund s assets estimated to be attributable to investments in other equity and fixed-income mutual funds and exchange-traded funds managed by BlackRock or its affiliates that have a contractual management fee, through January 31, The contractual agreement may be terminated upon 90 days notice by a majority of the non-interested trustees of BlackRock Funds V (the Trust ) or by a vote of a majority of the outstanding voting securities of the Fund. 4 Management Fee is based on the management fee rate of the Predecessor Fund (defined below) restated to reflect current fees. 5 Other Expenses are based on estimated amounts for the current fiscal year, which are based on the expenses of the Predecessor Fund for its most recent fiscal year. 6 The Total Annual Fund Operating Expenses do not correlate to the ratios of expenses to average net assets given in the Predecessor Fund s most recent annual report, which do not include the restatement of Management Fees to reflect current fees. 7 As described in the Management of the Funds section of the Fund s prospectus beginning on page 58, BlackRock has contractually agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (excluding Dividend Expense, Interest Expense, Acquired Fund Fees and Expenses and certain other Fund expenses) to 0.65% (for Investor A ), 1.40% (for Investor C ), 0.40% (for Institutional ) and 0.90% (for Class R ) of average daily net assets through January 31, The Fund may have to repay some of these waivers and/or reimbursements to BlackRock in the two years following such waivers and/or reimbursements. The contractual agreement may be terminated upon 90 days notice by a majority of the non-interested trustees of the Trust or by a vote of a majority of the outstanding voting securities of the Fund. 2
4 Example: This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: 1 Year 3 Years 5 Years 10 Years Investor A $291 $457 $637 $1,158 Investor C $244 $476 $831 $1,834 Institutional $ 42 $143 $253 $ 574 Class R $ 93 $357 $641 $1,450 You would pay the following expenses if you did not redeem your shares: 1 Year 3 Years 5 Years 10 Years Investor C $144 $476 $831 $1,834 Portfolio Turnover: The Fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Fund s performance. The Fund has not commenced operations as of the date of this prospectus, but it is expected that BlackRock Low Duration Bond Portfolio, a series of BlackRock Funds II (the Predecessor Fund ), will be reorganized into the Fund. During the most recent fiscal year, the Predecessor Fund s portfolio turnover rate was 292% of the average value of its portfolio. Principal Investment Strategies of the Fund The Low Duration Fund invests primarily in investment grade bonds and maintains an average portfolio duration that is between 0 and 3 years. The Low Duration Fund normally invests at least 80% of its assets in debt securities. The Low Duration Fund may invest up to 20% of its assets in non-investment grade bonds (commonly called high yield or junk bonds ). The Low Duration Fund may also invest up to 25% of its assets in assets of foreign issuers, of which 10% (as a percentage of the Fund s assets) may be invested in emerging markets issuers. Up to 10% of the Low Duration Fund s assets may be exposed to non-us currency risk. A bond of a foreign issuer, including an emerging market issuer, will not count toward the 10% limit on non-us currency exposure if the bond is either (i) US dollar-denominated or (ii) non-us dollardenominated, but hedged back to US dollars. The management team evaluates sectors of the bond market and individual securities within these sectors. The management team selects bonds from several sectors including: U.S. Treasuries and agency securities, commercial and residential mortgage-backed securities, collateralized mortgage obligations ( CMOs ), asset-backed securities and corporate bonds. The Low Duration Fund may buy or sell options or futures on a security or an index of securities, or enter into credit default swaps and interest rate or foreign currency transactions, including swaps (collectively, commonly known as derivatives). The Fund may use derivative instruments to hedge its investments or to seek to enhance returns. The Fund may seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as reverse repurchase agreements or dollar rolls). The Low Duration Fund may engage in active and frequent trading of portfolio securities to achieve its principal investment strategies. 3
5 Principal Risks of Investing in the Fund Risk is inherent in all investing. The value of your investment in the Fund, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time. You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. The following is a summary description of principal risks of investing in the Fund. Borrowing Risk Borrowing may exaggerate changes in the net asset value of Fund shares and in the return on the Fund s portfolio. Borrowing will cost the Fund interest expense and other fees. The costs of borrowing may reduce the Fund s return. Borrowing may cause the Fund to liquidate positions when it may not be advantageous to do so to satisfy its obligations. Debt Securities Risk Debt securities, such as bonds, involve interest rate risk, credit risk, extension risk, and prepayment risk, among other things. Interest Rate Risk The market value of bonds and other fixed-income securities changes in response to interest rate changes and other factors. Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall and decrease as interest rates rise. The Fund may be subject to a greater risk of rising interest rates due to the current period of historically low rates. For example, if interest rates increase by 1%, assuming a current portfolio duration of ten years, and all other factors being equal, the value of the Fund s investments would be expected to decrease by 10%. The magnitude of these fluctuations in the market price of bonds and other fixed-income securities is generally greater for those securities with longer maturities. Fluctuations in the market price of the Fund s investments will not affect interest income derived from instruments already owned by the Fund, but will be reflected in the Fund s net asset value. The Fund may lose money if short-term or long-term interest rates rise sharply in a manner not anticipated by Fund management. To the extent the Fund invests in debt securities that may be prepaid at the option of the obligor (such as mortgage-backed securities), the sensitivity of such securities to changes in interest rates may increase (to the detriment of the Fund) when interest rates rise. Moreover, because rates on certain floating rate debt securities typically reset only periodically, changes in prevailing interest rates (and particularly sudden and significant changes) can be expected to cause some fluctuations in the net asset value of the Fund to the extent that it invests in floating rate debt securities. These basic principles of bond prices also apply to U.S. Government securities. A security backed by the full faith and credit of the U.S. Government is guaranteed only as to its stated interest rate and face value at maturity, not its current market price. Just like other fixed-income securities, government-guaranteed securities will fluctuate in value when interest rates change. A general rise in interest rates has the potential to cause investors to move out of fixed-income securities on a large scale, which may increase redemptions from funds that hold large amounts of fixed-income securities. Heavy redemptions could cause the Fund to sell assets at inopportune times or at a loss or depressed value and could hurt the Fund s performance. Credit Risk Credit risk refers to the possibility that the issuer of a debt security (i.e., the borrower) will not be able to make payments of interest and principal when due. Changes in an issuer s credit rating or the market s perception of an issuer s creditworthiness may also affect the value of the Fund s investment in that issuer. The degree of credit risk depends on both the financial condition of the issuer and the terms of the obligation. Extension Risk When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these obligations to fall. Prepayment Risk When interest rates fall, certain obligations will be paid off by the obligor more quickly than originally anticipated, and the Fund may have to invest the proceeds in securities with lower yields. Derivatives Risk The Fund s use of derivatives may increase its costs, reduce the Fund s returns and/or increase volatility. Derivatives involve significant risks, including: Volatility Risk Volatility is defined as the characteristic of a security, an index or a market to fluctuate significantly in price within a short time period. A risk of the Fund s use of derivatives is that the fluctuations in their values may not correlate with the overall securities markets. 4 Counterparty Risk Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. Market and Liquidity Risk The possible lack of a liquid secondary market for derivatives and the resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more difficult for the Fund to value accurately. Valuation Risk Valuation may be more difficult in times of market turmoil since many investors and market makers may be reluctant to purchase complex instruments or quote prices for them. Hedging Risk Hedges are sometimes subject to imperfect matching between the derivative and the underlying security, and there can be no assurance that the Fund s hedging transactions will be effective. The use of hedging may result in certain adverse tax consequences.
6 Tax Risk Certain aspects of the tax treatment of derivative instruments, including swap agreements and commodity-linked derivative instruments, are currently unclear and may be affected by changes in legislation, regulations or other legally binding authority. Such treatment may be less favorable than that given to a direct investment in an underlying asset and may adversely affect the timing, character and amount of income the Fund realizes from its investments. Regulatory Risk Derivative contracts, including, without limitation, swaps, currency forwards and non-deliverable forwards, are subject to regulation under the Dodd-Frank Wall Street Reform and Consumer Protection Act ( Dodd Frank Act ) in the United States and under comparable regimes in Europe, Asia and other non-u.s. jurisdictions. Under the Dodd-Frank Act, certain derivatives are subject to margin requirements and swap dealers are required to collect margin from the Fund with respect to such derivatives. Specifically, regulations are now in effect that require swap dealers to post and collect variation margin (comprised of specified liquid instruments and subject to a required haircut) in connection with trading of over-the-counter ( OTC ) swaps with the Fund. of investment companies (other than certain money market funds) may not be posted as collateral under these regulations. Requirements for posting of initial margin in connection with OTC swaps will be phased-in through In addition, regulations adopted by prudential regulators that will begin to take effect in 2019 will require certain bank-regulated counterparties and certain of their affiliates to include in certain financial contracts, including many derivatives contracts, terms that delay or restrict the rights of counterparties, such as the Fund, to terminate such contracts, foreclose upon collateral, exercise other default rights or restrict transfers of credit support in the event that the counterparty and/or its affiliates are subject to certain types of resolution or insolvency proceedings. The implementation of these requirements with respect to derivatives, as well as regulations under the Dodd-Frank Act regarding clearing, mandatory trading and margining of other derivatives, may increase the costs and risks to the Fund of trading in these instruments and, as a result, may affect returns to investors in the Fund. Dollar Rolls Risk Dollar rolls involve the risk that the market value of the securities that the Fund is committed to buy may decline below the price of the securities the Fund has sold. These transactions may involve leverage. Emerging Markets Risk Emerging markets are riskier than more developed markets because they tend to develop unevenly and may never fully develop. Investments in emerging markets may be considered speculative. Emerging markets are more likely to experience hyperinflation and currency devaluations, which adversely affect returns to U.S. investors. In addition, many emerging securities markets have far lower trading volumes and less liquidity than developed markets. Foreign Securities Risk Foreign investments often involve special risks not present in U.S. investments that can increase the chances that the Fund will lose money. These risks include: The Fund generally holds its foreign securities and cash in foreign banks and securities depositories, which may be recently organized or new to the foreign custody business and may be subject to only limited or no regulatory oversight. Changes in foreign currency exchange rates can affect the value of the Fund s portfolio. The economies of certain foreign markets may not compare favorably with the economy of the United States with respect to such issues as growth of gross national product, reinvestment of capital, resources and balance of payments position. The governments of certain countries may prohibit or impose substantial restrictions on foreign investments in their capital markets or in certain industries. Many foreign governments do not supervise and regulate stock exchanges, brokers and the sale of securities to the same extent as does the United States and may not have laws to protect investors that are comparable to U.S. securities laws. Settlement and clearance procedures in certain foreign markets may result in delays in payment for or delivery of securities not typically associated with settlement and clearance of U.S. investments. High Portfolio Turnover Risk The Fund may engage in active and frequent trading of its portfolio securities. High portfolio turnover (more than 100%) may result in increased transaction costs to the Fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale of the securities and on reinvestment in other securities. The sale of Fund portfolio securities may result in the realization and/or distribution to shareholders of higher capital gains or losses as compared to a fund with less active trading policies. These effects of higher than normal portfolio turnover may adversely affect Fund performance. Junk Bonds Risk Although junk bonds generally pay higher rates of interest than investment grade bonds, junk bonds are high risk investments that are considered speculative and may cause income and principal losses for the Fund. Leverage Risk Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its costs. The use of leverage may 5
7 cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet any required asset segregation requirements. Increases and decreases in the value of the Fund s portfolio will be magnified when the Fund uses leverage. Liquidity Risk Liquidity risk exists when particular investments are difficult to purchase or sell. The Fund s investments in illiquid securities may reduce the returns of the Fund because it may be difficult to sell the illiquid securities at an advantageous time or price. To the extent that the Fund s principal investment strategies involve derivatives or securities with substantial market and/or credit risk, the Fund will tend to have the greatest exposure to liquidity risk. Liquidity risk may be the result of, among other things, the reduced number and capacity of traditional market participants to make a market in fixed-income securities or the lack of an active market. Liquid investments may become illiquid or less liquid after purchase by the Fund, particularly during periods of market turmoil. Illiquid and relatively less liquid investments may be harder to value, especially in changing markets, and if the Fund is forced to sell these investments to meet redemption requests or for other cash needs, the Fund may suffer a loss. This may be magnified in a rising interest rate environment or other circumstances where investor redemptions from fixed-income mutual funds may be higher than normal. In addition, when there is illiquidity in the market for certain securities, the Fund, due to limitations on illiquid investments, may be subject to purchase and sale restrictions. Market Risk and Selection Risk Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money. Mortgage- and Asset-Backed Securities Risks Mortgage- and asset-backed securities represent interests in pools of mortgages or other assets, including consumer loans or receivables held in trust. Mortgage- and assetbacked securities are subject to credit, interest rate, prepayment and extension risks. These securities also are subject to risk of default on the underlying mortgage or asset, particularly during periods of economic downturn. Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain mortgage-backed securities. Repurchase Agreements and Purchase and Sale Contracts Risk If the other party to a repurchase agreement or purchase and sale contract defaults on its obligation under the agreement, the Fund may suffer delays and incur costs or lose money in exercising its rights under the agreement. If the seller fails to repurchase the security in either situation and the market value of the security declines, the Fund may lose money. Reverse Repurchase Agreements Risk Reverse repurchase agreements involve the sale of securities held by the Fund with an agreement to repurchase the securities at an agreed-upon price, date and interest payment. Reverse repurchase agreements involve the risk that the other party may fail to return the securities in a timely manner or at all. The Fund could lose money if it is unable to recover the securities and the value of the collateral held by the Fund, including the value of the investments made with cash collateral, is less than the value of the securities. These events could also trigger adverse tax consequences to the Fund. U.S. Government Issuer Risk Treasury obligations may differ in their interest rates, maturities, times of issuance and other characteristics. Obligations of U.S. Government agencies and authorities are supported by varying degrees of credit but generally are not backed by the full faith and credit of the U.S. Government. No assurance can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do so. Performance Information The Fund has not commenced operations as of the date of this prospectus. The returns presented for the Fund reflect the performance of the Predecessor Fund. It is anticipated that on or about September 17, 2018, the Fund will acquire all of the assets, subject to the liabilities, of the Predecessor Fund through a tax-free reorganization (the Reorganization ). As a result of the Reorganization, the Fund will adopt the performance and financial history of the Predecessor Fund. The Reorganization is being consummated in connection with a potential reconfiguration of the existing fund complexes overseen by the boards of directors/trustees of the BlackRock-advised funds. The Fund has the same investment objectives, strategies and policies, portfolio management team and contractual arrangements, including the same contractual fees and expenses, as the Predecessor Fund. As a result, the performance of the Fund would have been substantially similar to that of the Predecessor Fund. The information shows you how the Predecessor Fund s performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the Predecessor Fund s performance to that of the ICE BofAML 1-3 Year US Corporate & Government Index. The returns for the Predecessor Fund s Class R prior to July 18, 2011, the commencement of operations of the Predecessor Fund s Class R, are based upon performance of the Predecessor Fund s Institutional, as adjusted to reflect the distribution and service (12b-1) fees applicable to 6
8 Class R. To the extent that dividends and distributions have been paid by the Predecessor Fund, the performance information for the Predecessor Fund in the chart and table assumes reinvestment of the dividends and distributions. As with all such investments, past performance (before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. However, the table includes all applicable fees and sales charges. If the Predecessor Fund s investment manager and its affiliates had not waived or reimbursed certain Predecessor Fund expenses during these periods, the Predecessor Fund s returns would have been lower. Updated information on the Fund s performance, including its current net asset value, can be obtained by visiting or can be obtained by phone at Investor A ANNUAL TOTAL RETURNS BlackRock Low Duration Bond Portfolio As of 12/31 20% 15% 13.54% 10% 5% 0% 5.08% 1.86% 4.84% 0.99% 1.18% 0.48% 1.66% 1.72% -5% -10% -15% -9.30% During the ten-year period shown in the bar chart, the highest return for a quarter was 4.77% (quarter ended September 30, 2009) and the lowest return for a quarter was 6.18% (quarter ended December 31, 2008). The year-to-date return as of June 30, 2018 was 0.01%. As of 12/31/17 Average Annual Total Returns 1 Year 5 Years 10 Years BlackRock Low Duration Bond Portfolio Investor A Return Before Taxes (0.57)% 0.74% 1.83% Return After Taxes on Distributions (1.39)% 0.00% 0.90% Return After Taxes on Distributions and Sale of Fund (0.33)% 0.23% 1.03% BlackRock Low Duration Bond Portfolio Investor C Return Before Taxes 0.07% 0.46% 1.31% BlackRock Low Duration Bond Portfolio Institutional Return Before Taxes 1.97% 1.50% 2.41% BlackRock Low Duration Bond Portfolio Class R Return Before Taxes 1.46% 0.91% 1.66% ICE BofAML 1-3 Year US Corporate & Government Index (Reflects no deduction for fees, expenses or taxes) 0.86% 0.86% 1.86% After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Investor A only, and the after-tax returns for Investor C, Institutional and Class R will vary. Investment Manager The Fund s investment manager is BlackRock Advisors, LLC (previously defined as BlackRock ). 7
9 Portfolio Managers Name Portfolio Manager of the Fund Since* Title Thomas Musmanno, CFA 2008 Managing Director of BlackRock, Inc. Scott MacLellan, CFA 2012 Director of BlackRock, Inc. * Includes management of the Predecessor Fund. Purchase and Sale of Fund You may purchase or redeem shares of the Fund each day the New York Stock Exchange is open. To purchase or sell shares you should contact your Financial Intermediary, or, if you hold your shares through the Fund, you should contact the Fund by phone at (800) , by mail (c/o BlackRock Funds, P.O. Box 9819, Providence, Rhode Island ), or by the Internet at The Fund s initial and subsequent investment minimums generally are as follows, although the Fund may reduce or waive the minimums in some cases: Minimum Initial Investment Investor A and Investor C Institutional Class R $1,000 for all accounts except: $50, if establishing an Automatic Investment Plan. There is no investment minimum for employersponsored retirement plans (not including SEP IRAs, SIMPLE IRAs or SARSEPs). There is no investment minimum for certain fee-based programs. There is no minimum initial investment for: Employer-sponsored retirement plans (not including SEP IRAs, SIMPLE IRAs or SARSEPs), state sponsored 529 college savings plans, collective trust funds, investment companies or other pooled investment vehicles, unaffiliated thrifts and unaffiliated banks and trust companies, each of which may purchase shares of the Fund through a Financial Intermediary that has entered into an agreement with the Fund s distributor to purchase such shares. Clients of Financial Intermediaries that: (i) charge such clients a fee for advisory, investment consulting, or similar services or (ii) have entered into an agreement with the Fund s distributor to offer Institutional through a no-load program or investment platform. $100 for all accounts. 8
10 Minimum Initial Investment (continued) Minimum Additional Investment Investor A and Investor C Institutional Class R $2 million for individuals and Institutional Investors, which include, but are not limited to, endowments, foundations, family offices, local, city, and state governmental institutions, corporations and insurance company separate accounts who may purchase shares of the Fund through a Financial Intermediary that has entered into an agreement with the Fund s distributor to purchase such shares. $1,000 for: Clients investing through Financial Intermediaries that offer such shares on a platform that charges a transaction based sales commission outside of the Fund. Tax-qualified accounts for insurance agents that are registered representatives of an insurance company s broker-dealer that has entered into an agreement with the Fund s distributor to offer Institutional, and the family members of such persons. $50 for all accounts (with the No subsequent minimum. No subsequent minimum. exception of certain employersponsored retirement plans which may have a lower minimum). Tax Information The Fund s dividends and distributions may be subject to U.S. federal income taxes and may be taxed as ordinary income or capital gains, unless you are a tax-exempt investor or are investing through a qualified tax-exempt plan described in section 401(a) of the Internal Revenue Code, in which case you may be subject to U.S. federal income tax when distributions are received from such tax-deferred arrangements. Payments to Broker/Dealers and Other Financial Intermediaries If you purchase shares of the Fund through a Financial Intermediary, the Fund and BlackRock Investments, LLC, the Fund s distributor, or its affiliates may pay the Financial Intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the Financial Intermediary and your individual financial professional to recommend the Fund over another investment. Ask your individual financial professional or visit your Financial Intermediary s website for more information. 9
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13 INVESTMENT COMPANY ACT FILE # SPROV-LOWD-0818